Ohio Utilities to Reduce Customer Costs by $106 Million Through Securitization

FirstEnergy Corp’s Ohio utilities are the first to take advantage of Ohio’s new securitization legislation, which became state law in late 2011, allowing them to reduce costs to customers by financing deferred costs using AAA-rated, long-term securitization financing.

Aug 02, 2013

FirstEnergy Corp’s Ohio utilities are the first to take advantage of Ohio’s new securitization legislation, which became state law in late 2011, allowing them to reduce costs to customers by financing deferred costs using AAA-rated, long-term securitization financing. The transaction resulted in the FirstEnergy Ohio utilities — Ohio Edison, Cleveland Electric Illuminating and Toledo Edison — achieving savings for customers of US$106 million through 2035. Ohio Edison, Cleveland Electric Illuminating and Toledo Edison will begin passing along those savings directly to their respective customers through lower monthly charges.

In 2012, the Public Utilities Commission of Ohio approved FirstEnergy’s request to securitize deferred costs that were already being recovered from customers under certain approved recovery riders associated with deferred generation and fuel costs, as well as discounts for certain residential customers. The securitization transaction resulted in the issuance of approximately $445 million of securities known as pass-through trust certificates. One new rider to recover the costs associated with the securitization transaction will go into effect tomorrow replacing the previously approved recovery riders.